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The Seine-Nord canal project is now very close to being abandoned by the French Government, along with the Lyon-Turin rail link and base tunnel and about 15 other sections of the high-speed rail network, promoted in 2010 under the ‘Grenelle’ package of measures for the environment (reported by Les Echos)

An ‘excuse’ for abandoning the canal project, which is the subject of transnational agreements with Belgium and the Netherlands, is the increase in estimated cost of the 106km long canal, with 7 locks, from €4.5 billion to €5 or 6 billion. The statement by Secretary of State for the Budget Jérôme Cahuzac also calls into question the economic viability of the project.

The article in Les Echos underlines the difference in treatment between railway and waterway projects mentioned in the July 6 post on this subject.

a) The high-speed railway lines where works have already started are saved from the chop; the preparatory works already carried out on Seine-Nord appear to count less; they include the lowering of a section of the A29 motorway to allow for the future aqueduct.

b) The economic return on the canal is doubted, but no mention is made of the rate of return on the railway projects; assumptions are made, fuelled by environmentalist policies, on the network benefits of adding new sections to the rail network, while the network effect of linking the Seine basin to the Rhine is ignored or at least underestimated in a purely financial analysis. (It takes time to set up new logistics practices and transport chains.)

The competitive dialogue between VNF, project authority, and the two candidates, Bouygues and Vinci, is to be completed by October, but it seems that the construction giants have themselves been playing into the hands of the new Government, by preparing for abandonment of the project. They have been ‘going through the motions’, while possibly even agreeing that the project was a non-starter and increasing the cost estimates. The limits of the PPP exercise have been starkly revealed.

Evidence of this possible ‘death foretold’ is the attitude of the two companies, whose leaders hardly reacted to the news, as if they had themselves been promoting what Les Echos describes as an inevitable ‘return to reality’.

It remains to see what pressure the European Commission and the Belgian and Dutch partners in the Seine-Scheldt project can bring to bear on the French Government, to restart the project on a sounder basis. The EU’s funding share for the Lyon-Turin base tunnel would alone pay for the new canal! Even at €6 billion, the cost of the canal is only a fraction of the €260 billion cost of all the the planned high-speed rail lines.

The proposed Seine-Nord Europe Canal will create a high-capacity freight corridor from Le Havre to northern France, the Benelux countries and the Rhine, for a cost estimated at €4.3 billion, of which €2.1 billion to be funded by a private partner. The selection process with the two declared candidates for building and operating the canal – Bouygues Travaux Publics and Vinci Concessions – is expected to be completed by the end of 2012.

Of course there are reasons for concern. The economic outlook is bleak, as France prepares for her austerity diet, and there is no shortage of bad omens. Everybody I’ve spoken to since the change in government has expressed fears for the 106km-long new canal, despite its trans-European character. A transport ministry memo tabled the option of cancelling the project. But the Seine-Scheldt link is still Project 30 in Europe’s transport infrastructure programme!

Transport Minister Frédéric Cuvillier, interviewed on June 23, was critical of the project’s funding model, which appears to have overestimated the ability of the future private-sector partner to put up one fifth of the investment cost in return for the operating revenue (tolls) over a 40-year concession. Both the previous government and VNF were discreet on this subject in the run-up to the elections, but the reality today is that the funding package is short of target by around €2 to 2.5 billion.

The minister underlined that major infrastructure projects, such as the Lyon-Turin rail link or the Seine-Nord Canal, “can only go ahead if the European funding is guaranteed at a reasonable level.” To date, the anticipated EU funding of the investment has been fixed at about €330 million, or less than 8% of the total investment. In view of the growth package negotiated by European leaders, part of which involves spending unallocated funds on infrastructure projects, it is felt that a strong case can be made for stepping up the EU’s share to 20% or even more. Getting the project under way despite such unfavourable circumstances would send a very strong message about Europe and the capacity of member states to plan for the long term.

Rumours of abandonment of the project, which VNF has been working on intensely since it was founded in 1991, were fuelled by political as well as economic arguments. The greens have always been luke-warm about new waterway links. They accept the argument that waterborne transport is the most energy-efficient and least pollutant mode, but they are convinced that rail provides an equivalent service, and that railway investments should take priority.

Already in a report produced in 1997 for the mayors of Lyon and Marseille, I predicted that the increase in passenger movements by rail would threaten the capacity of rail to handle freight economically. Today the case is proven, as the railway lobby in France is pushing for the construction of no less than 1000km of new railway lines, to give rail solutions a chance of competing with the alternatives. But this competitiveness could only be obtained by direct or indirect subsidies which are contrary to EU policies and decisions. By contrast, the waterway lobby has been pressing the case for infrastructure improvements with a more balanced approach, recognising the value of road and rail in combined transport solutions.

Since the June 23 interview there has been a clash between the Transport Minister and a predecessor in the previous government Jean-Louis Borloo, incidentally instigator of the Grenelle round table on the environment.

Setting aside the party politics and the inevitable rhetoric on both sides, the fact is that a new funding package is now to be assembled, and submitted to the European Commission at the end of the year. The increased EU funding would be matched by an additional effort by the regions benefiting from the new infrastructure.

A report commissioned by former prime minister François Fillon has delivered its verdict on the scale of works required to restore the Canal du Midi‘s priceless tree canopy. The 42,000 plane trees (82% of the trees lining the banks) are being decimated by canker stain. Despite a range of preventive measures and careful felling of the affected trees, the whole population of plane trees east of Carcassonne is practically condemned. VNF, managing this UNESCO world heritage site, developed a plan for regeneration in close collaboration with the Government’s High Commission on Sites and Landscapes (CSSP), but the report suggests intensifying the campaign to fell the diseased trees and replant resistant species throughout the length of the canal over a much shorter time-frame than initially envisaged: 10 years.

The immemorial landscape of the Canal du Midi lined by plane-trees features on the cover of the Chatillon report

The cost to covered over the 10 years is estimated at €200 million, and breaks down as follows:
• €79 M (just under 40%) for the tree felling (this concerns not only the trees lining the canal but also the bordering woodland areas; in all, 4000 trees to be cut down per year, with a dedicated staff of 64 tree surgeons),
• €44 M (22%) for replanting trees lining the canal, including 2 years of maintenance,
• €72M (36%) for bank protection works,
• €4M (2%) for preventive measures: research and development and protection of roots in the non-contaminated areas.
This evaluation does not include the costs of prospection, monitoring and trimming the trees as required over a period of 15 to 20 years to form the characteristic canopy.

Newly planted plane trees at Trèbes, at intervals of 7m

The new report was commissioned from Haute-Garonne Senator Alain Chatillon, who is also the mayor of Revel, in the heart of the canal’s feeder system at the foot of the Montagne Noire.

The Government wanted a broader strategic view of the issues raised by the environmental disaster which sent a huge shock through all involved in managing the waterway.

The first conclusion is that both the tree felling and the replanting should be moved forward more rapidly. VNF is currently dealing with 300 trees per year.

But the Chatillon report seeks above all to justify the investment, to better define the canal’s values, to identify means of funding the works and to prepare for long-term governance of the waterway.

The socio-economic benefits of the canal through recreational use and tourism on the water and on the banks have been documented for many years, and are undisputed. But the rapporteur implies that there is inadequate ‘bundling’ of the canal into broader-based tourism products through the corridor, which should be considered like a ‘valley’.
He fears that transformation of the canal’s landscape will have a negative impact on the canal’s image and use in the coming years, and suggests that planning should start without delay, to adapt to the probable changes in visitor’s use patterns. He also feels that the canal’s parallel functions of irrigation and water supply should receive more strategic attention.

Funding the works – Chatillon suggests that one third of the cost should be covered by the State, one third by the regions (including EU funding and interregional cooperation projects supported by INTERREG), and the last third by corporate patronage. The State part could be achieved through an increase in the boat licences paid for the canal (an extra €200 000 per year) through VNF, and application of a visitor’s tax per night, as applied for hotel nights. More value should be extracted from properties within the canal’s estate, he suggests.

Corporate patronage incentives – Alain Chatillon sees considerable potential for attracting funds from the private sector. The UNESCO listing will give contributors worldwide visibility, and the population is genuinely attached to the canal through its history and as a tourism asset. Corporate patronage could be boosted by the tax reduction of 60% to be claimed on contributions. The tax rebate is even higher for individual contributions (66%).

Scenarios for developing patronage – The idea is eventually to create a trust, which could be part of a national heritage foundation. In the meantime, a public subscription offer could be set up to attract funds from the general public, while a club of canal patrons could be the first stage in promoting the principle of patronage, eventually leading to a strong patronage offer associated with the tasks of preserving and restoring the canal’s environmental and cultural heritage.

Canal marketing – Chatillon is convinced that the canal’s tourism-based economy can only survive if it is associated with a clearly identifiable mark, supported by a seal of approval (‘label’ in French). This is the only weak link in an otherwise well-structured and well-argumented report, because no orientation is suggested. Marketing initiatives taken by VNF and the three regions have to date produced limited results, especially at the international level. The information portal Rivières et Canaux du Midi does not even have an English version! This is European and regional funds poorly spent.

The report examines three possible scenarios. The plane-tree replanting programme has highlighted the difficulty in taking measures with such a complex and multi-layered network of stakeholders, and a common structure is now increasingly urgent, not just on the Canal du Midi but throughout the ‘Deux Mers’ route and its connecting waterways.

Scenario 1 – VNF continues to manage the waterway. The partners sign a co-funding agreement for 15 years; in return, they are fully associated in the decision-making process, and have clearly defined tasks to perform. Complete transparency is essential for this approach to work, to ensure that the regions and the other stakeholders feel a genuine sense of ownership of the canal. This scenario has the advantage of avoiding any interruption in management, and being quick to implement.Scenario 2 – A new structure is set up, such as a mixed economy corporation (‘Société d’Économie Mixte’) or a Public Interest Grouping (GIP), which would collect the public funding for the canal’s environmental functions: the tree-planting and water resources. This organisation, as project authority or ‘owner’ for the projects thus funded, possibly with VNF as contracting agency, would at last embody the effective cooperation among the three regions Aquitaine, Midi-Pyrénées and Languedoc-Roussillon.Scenario 3 – The most ambitious scenario involves setting up an independent interregional body for development of the Canal des Deux Mers. This would have the strongest identity, and would be focused on local development, animation and enhancement of the canal. It would cover the three essential missions of a waterway authority:
- environmental (tree-planting and water resources),
- managing the waterway property and economic development,
- tourism development based on the ‘valley concept’ (on and around the water).
The funders would bring together all players wishing to be involved in these three fields of action, and would delegate their authority to a management body. The transfer of these responsibilities to an interregional agency has proved to be successful at a smaller scale. Our member the Entente Vallée du Lot is an example. This new entity would effectively coordinate the three missions, each performed by specific operators. This could be the new ‘founding act’ of the canal, just as the White Paper laid valid foundations, albeit with inadequate results, in 1996.

Alain Chatillon, senator of Haute-Garonne, mayor of Revel, author of the report

Watch out for further information and updates on this issue of heritage canal governance which is critical for French waterways in general!

Our thanks to the Réseau Fluvial Toulousain for drawing our attention to the press conference.

French president François Hollande supports inland water transport as a carrier of freight to and from the country’s struggling seaports. While still a candidate in the second round of the presidential election, he signed on May 2nd a letter to two waterway organisations indicating a firm intention to revive the Environmental Policy initiated and then abandoned by the previous government, to transfer more freight from road to rail and water. IWI‘s February Newsletter featured the letter from Jacques Romain, president of the Entente des Canaux du Centre France, to all 10 candidates for the presidential office. A similar initiative was taken by the French barge-owners through their representative body, the Chambre Nationale de la Batellerie Artisanale.

The letter, of which an English translation has been produced by DBA–The Barge Association (click on thumbnail, left), sets out the candidate’s objectives for transport and inland waterways, and underlines the importance of investment in infrastructure to ensure competitivity of intermodal solutions to and from the main seaports: Marseille, Le Havre and Dunkirk. The ports (and industry) are handicapped by the unsatisfactory waterway links to the hinterland, as a result of which, for example, 85% of freight movements to and from the port of Marseille are by road.
Water transport still only accounts for 2.2% of inland freight movements in France, compared with 12% in Germany, 16% in Belgium and 33% in the Netherlands. The policy statement refers to both the Seine-Nord Europe Canal and the Saône-Moselle.Saône-Rhine waterways, ‘to be the subject of careful study’, and to the principle of a pollution tax contributing to the funding of new investments. He stigmatises the previous government’s failure to implement the ‘Grenelle Round Table’ measures, aimed at increasing the share of rail and water to 25% of total freight movements.

The Entente (with its member DBA–The Barge Association) and the CNBA are to be congratulated for their initiative. Although the response is that of a candidate seeking votes, with all the caveats that implies, it is evidence of a position that is totally supportive of inland waterways. There will doubtless be occasions to remind President Hollande and his government of the candidate’s policy statement.

Barge owners and operators will contribute up to half of the cost of building the 106km long Seine-Nord Europe canal through the toll levied by the canal’s future private-sector operator.
Two approaches were discussed at a meeting on April 18 in Ghent, bringing together VNF, Waterwegen & Zeekanalen (Flanders) and Service Public de Wallonie (Wallonia).
The first, proposed by the project partners, involves charging more for goods that are ‘captive’ or most likely to be carried by water, such as agricultural products, bulk minerals and metals, and less for goods more difficult to win from road and rail, such as containers.
The carriers argued on the contrary for a toll indexed on the value of the cargoes.

Route of the Seine-Nord Europe Canal, close to the existing Canal du Nord, which will be abandoned except for the short connecting length with four locks north of Péronne

The proposed tolls range from €2 to €4.90 per tonne, according a report in the French magazine NPI – Navigation, Ports & Intermodalité.
These tolls were set at a level corresponding to 30% of the saving in transport costs offered by the canal.
This means that the carrying industry will retain 70% of the benefit of the reduction in transport costs.

It remains to select the private-sector partner to design, build and operate the waterway, although the competitive dialogue process should be completed in the coming weeks.

Watch this space!

Artist's impression of aqueduct carrying the new canal over the A29 motorway